Merger and Acquisition Strategies

Merger and Acquisition Strategies

How to Create Value

New Perspectives on the Modern Corporation series

Angelo Dringoli

The decision to carry out a merger or acquisition is certainly a risky one, not least because of the number of variables influencing the final outcome. It is also a decision frequently based on the wrong objectives and an incorrect evaluation process. With this in mind, this important new book offers solutions for reducing the high percentage of mergers and acquisitions (M & As) that fail. It adopts a normative approach, using theoretical analysis to show what managers could and should do to increase shareholders’ value through successful M & A strategies. It also explores the conditions that are suitable for favouring a certain type of M & A (horizontal, vertical or diversified) over the others. In conclusion, the book presents case studies of successful M & A strategies providing a link between theory and practice.

Chapter 4: Identifying the opportunities for successful M & As

Angelo Dringoli

Subjects: business and management, strategic management, economics and finance, industrial organisation


Growth through M & A can assume different patterns according to the direction of the expansion to be carried out: horizontal, vertical or diversified. The specific growth pattern that a firm should follow, in order to create value, depends on the characteristics of its business system and the external environment, in particular the structure of the industry and its dynamics. Therefore, it is necessary, on one hand, to analyse in depth the structure of firms involved in the merger, for discovering which activities and resources can offer the best opportunities for successful M & As. On the other hand, it is very important to analyse the structure and the dynamics of the industry where the firm wants to expand its activities, so as to properly understand opportunities and risks.

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